Correlation Between KB Financial and BlackRock TCP

Can any of the company-specific risk be diversified away by investing in both KB Financial and BlackRock TCP at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KB Financial and BlackRock TCP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KB Financial Group and BlackRock TCP Capital, you can compare the effects of market volatilities on KB Financial and BlackRock TCP and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KB Financial with a short position of BlackRock TCP. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and BlackRock TCP.

Diversification Opportunities for KB Financial and BlackRock TCP

0.85

Correlation Coefficient

KB Financial  BlackRock TCP

Very poor diversification

The 3 months correlation between KB Financial and BlackRock is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and BlackRock TCP Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock TCP Capital and KB Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KB Financial Group are associated (or correlated) with BlackRock TCP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock TCP Capital has no effect on the direction of KB Financial i.e., KB Financial and BlackRock TCP go up and down completely randomly.

Pair Corralation between KB Financial and BlackRock TCP

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.56 times more return on investment than BlackRock TCP. However, KB Financial is 1.56 times more volatile than BlackRock TCP Capital. It trades about 0.28 of its potential returns per unit of risk. BlackRock TCP Capital is currently generating about 0.11 per unit of risk. If you would invest  6,034  in KB Financial Group on April 26, 2025 and sell it today you would earn a total of  3,002  from holding KB Financial Group or generate 49.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

KB Financial Group  vs.  BlackRock TCP Capital

KB Financial Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental drivers, KB Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

BlackRock TCP Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock TCP Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, BlackRock TCP may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with KB Financial and BlackRock TCP

The main advantage of trading using opposite KB Financial and BlackRock TCP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, BlackRock TCP can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BlackRock TCP will offset losses from the drop in BlackRock TCP's long position.

The idea behind KB Financial Group and BlackRock TCP Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.